Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/69997 
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper No. 4116
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
In this note, we argue that the Eurozone needs an institutional exit mechanism to enhance Eurozone stability, and propose modifications to the Dobbs' NEWNEY mechanism, the only mechanism that satisfies the twin properties of eliminating incentives for intra-Eurozone capital flight and maintaining Eurozone price stability. Our modifications eliminate moral hazard, allow for a fair distribution of costs (between and within countries) and are also appropriate for the exit of a fiscally strong country.
Subjects: 
Eurozone
Eurozone exit
price stability
JEL: 
E44
E52
Document Type: 
Working Paper
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